Economy grows 0.6% but fears of double-dip loom large
The challenges faced by the global economy have been underlined by mixed growth figures from both sides of the Atlantic.
The UK economy grew at an upwardly revised rate of 0.6% between July and September, but the estimate for gross domestic product (GDP) growth in the second quarter was slashed to 0% from 0.1%, the Office for National Statistics reported.
Meanwhile, the US economy grew more slowly in the third quarter than previously estimated. But economists said the world's largest economy is set to record a strong finish to the year.
Analysts warned the UK was still teetering on the brink of recession, despite the improved third quarter figures, which were revised up from a previous estimate of 0.5%, as indicators point towards a slowdown as the new year approaches.
The overall picture at home was broadly unchanged by the revised figures as the country still faces considerable headwinds in the new year, notably from the eurozone, the UK's biggest trade partner, which is buckling under the pressure of a crippling debt crisis.
Dr Esmond Birnie, economist at accountancy firm PwC, believes there is hope for the UK economy but Northern Ireland could lag behind.
He said: "The Q3 0.6% increase is the strongest quarterly growth for four years with composition of growth relying more on investment and less on government consumption.
"Looking to the new year and assuming the eurozone crisis doesn't worsen, the UK economy could grow by around 0.5%-1% in 2012.
"However, this is the likely prognosis for the UK as a whole, so some regions like Northern Ireland could experience growth well below this figure."
Manufacturing, services and trade surveys have been mixed so far in the final quarter of the year, prompting fears that the UK is heading for a double-dip recession.
The tax and spending watchdog, the Office for Budget Responsibility, recently slashed official forecasts for growth following a similar downbeat assessment of the economy from the Bank of England.
The powerhouse services sector, which makes up some 75% of the total economy, grew at 0.7% in the third quarter, up from a previous estimate of 0.6%. Agriculture grew at 0.5% while construction was ahead 0.3%. But industrial production growth was revised down to 0.2% from 0.4%.